MANUEL V. PANGILINAN

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21 Νοε 2013 (πριν από 3 χρόνια και 11 μήνες)

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“INCLUSIVE GROWTH


IMPOSSIBLE DREAM?”

MANUEL V. PANGILINAN

37
th

General Assembly & Annual Meeting


Bishops
-
Businessmen’s Conference

July 8, 2013 Pope Pius XII Center


HIS

EMINENCE CARDINAL TAGLE, MINISTERS OF THE CHURCH, BBC MEMBERS, FRIENDS


THANK YOU FOR THE OPPORTUNITY
TO SHARE OUR THOUGHTS ON INCLUSIVE GROWTH.


WHEN CHITO FRANCISCO INVITED ME TO SPEAK BEFORE ALL OF YOU, I WAS RELUCTANT AT FIRST, BECAUSE THE ONLY
EXPER
IENCE I HAVE, SPEAKING WITH PRIESTS, IS IN THE CONFESSIONAL.


I WAS HESITANT BECAUSE BUSINESS AND SOME SECTORS OF THE CHURCH MAY HOLD DIVERGENT VIEWS ON CERTAIN
BUSINESS MATTERS.


BUT I FELT IT IMPORTANT TO ACKNOWLEDGE

THAT DESPITE THOSE DIFFERENCES, OUR VALUES CONVERGE ON OUR MOST
ESSENTIAL GOAL


TO IMPROVE THE LIVES OF OUR PEOPLE. WE’VE LONG WORKED WITH THE CHURCH ON MANY SOCIAL
PROGRAMS


POVERTY RELIEF, DISASTER RESPONSE, HEALTH CARE, EDUCATION


BUILDING ON SHARE
D MISSIONS.


INTRODUCTION


I UNDERSTAND THAT INCLUSIVE GROWTH WAS ALSO THE THEME OF LAST YEAR’S ASSEMBLY. THIS SUGGESTS THAT THE
BBC ACCORDS IT THE URGENCY IT DESERVES. AGAINST THE BACKDROP OF RECENT IMPRESSIVE GDP GROWTH RATES,
POVERTY REDUCTION, AS DESI
RED, HAS NOT BEEN MET.


AT THE OUTSET, I MUST CONCEDE THAT INCLUSIVE GROWTH IS COMPLEX AND ENIGMATIC TO DEFINE. THERE IS A THE
SIMPLISTIC VIEW THAT DEVELOPMENT IS A MATTER OF ENDOWING THE POOREST WITH THE MOST BENEFIT, THAT THE
SOLUTION IS AS STRAIGHTFOR
WARD AS CREATING MORE JOBS. SEDUCTIVELY SIMPLE AND YET NAÏVE. ONE OTHER VIEW IS
THAT INCLUSIVE GROWTH INVOLVES A COMPLICATED INTERPLAY OF POLICIES, INCENTIVES, FOCUS, AND SOUND
MANAGEMENT TO WORK. EVEN THEN, SOLUTIONS WILL NOT BE IMMEDIATE, BUT LONG
-
TERM.

THERE IS ALSO THE
CONVENTIONAL THEORY WHICH PROPOSES THAT SIGNIFICANT AND SUSTAINED GDP GROWTH CAN CREATE SUCH
MOMENTUM AS TO LIFT THE WELFARE OF THE GREATER NUMBER OF THE POOR. THE 600 MILLION PEOPLE IN CHINA WILL
ATTEST TO THIS. HOWEVER, THE EXPERIENCE

IN INDIA HAS NOT BEEN SIMILAR.


BUSINESS AND THE POOR


THE FIRST PACIFIC VIEW


TO PROVIDE CONTEXT TO MY REMARKS TODAY, LET ME DESCRIBE TWO BASIC PRINCIPLES CLOSE TO OUR HEART AT FIRST
PACIFIC:



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FIRST
, BUSINESS’S TRADITIONAL ROLE IS TO PROVIDE GOODS AN
D SERVICES FOR A PROFIT. BEYOND THIS LIES A SOCIAL
DIMENSION


THAT FORMS AN INTEGRAL PART OF OUR BUSINESS. WE EXIST BECAUSE THERE ARE MARKETS


AND MARKETS ARE
PEOPLE, RICH AND POOR. WHEN BOTH MARKETS AND BUSINESS THRIVE, THEY SERVE

ALL PARTS OF THE ECONOMIC
PYRAMID


THE TOP AS WELL AS THE BOTTOM.


BUSINESSES DO TRANSFORM SOCIETIES. THEY NOT ONLY SHAPE OUR PHYSICAL AND OUR VIRTUAL WORLDS, BUT ALSO
CREATE NEW NEEDS, NEW HOPES, NEW DREAMS. JUST THINK OF CELFONES IN THE HANDS OF FAR
MERS.


INDEED, BECAUSE OF ITS SIZE AND INFLUENCE


THE PRIVATE SECTOR IS THE LARGEST EMPLOYER IN THE ECONOMY


BUSINESS MUST CARRY WITH IT THE COMMENSURATE MEASURE OF RESPONSIBILITY AND ACCOUNTABILITY TO SOCIETY.


HELPING THE POOR RUNS TO BUSINESS’S SELF
-
INTEREST. AS ECONOMIC WELFARE IMPROVES, PURCHASING POWER RISES
AND ENABLES EVEN THE POOR TO RAISE THEIR DEMAND FOR PRODUCTS AND SERVICES. A VIRTUAL CYCLE OF PROSPERITY
IS THEREFORE CREATED.


AN APPROACH TO INCLUSIVE GROWTH


FROM OUR PERSPECTIVE, GROWTH ME
ANS SUPPLYING TWO THINGS:
FIRST
, DEMOCRATIZING ACCESS FOR THE POOR


ACCESS TO CREDIT, TO MARKETS, TO TECHNOLOGY AND INFORMATION, TO EDUCATION AND TO INFRASTRUCTURE,
SECOND
,
EMPOWERING THE POOR WITH SOUND MANAGEMENT AND AN ENTREPRENEURIAL SPIRIT.


E
-
LOAD A
ND PASALOAD


LET ME GIVE A FEW EXAMPLES ON HOW BUSINESS HELPS PROVIDE ACCESS.


THE FOLKLORE WITHIN SMART IS THAT THE IDEA FOR SMART’S ELECTRONIC LOAD WAS INCUBATED OVER LUNCH, AT OUR
CORPORATE CANTEEN. ONE SALES PERSON ASKED IF IT WAS POSSIBLE TO SELL PREP
AID LOAD IN SMALLER AMOUNTS


OR
SACHETS
-

AND PASS IT AROUND AMONGST SUBSCRIBERS VIA CELPHONES.


HERETOFORE, PREPAID LOAD WAS SOLD THROUGH EXPENSIVE, UNWIELDY PREPAID CARDS, THE LOWEST DENOMINATION AT
300 PESOS. MANY HAVE BENEFITTED FROM PREPAID SERVICE, BUT THERE WERE MANY MORE WHO COULD NOT AFFORD TO
BUY A 300 PESO LOAD. THE SECRET INGREDIENT LAY IN

SELLING AIRTIME LOAD IN SACHET SIZES. NOW, YOU CAN BUY LOAD
FOR AS LOW AS 10 PESOS. LIKE SELLING SOAP AND SHAMPOO. SO VERY FILIPINO.


SMART, TALK N’ TEXT AND SUN CELLULAR TOGETHER HAVE ABOUT 1.2 MILLION ACTIVE RETAILERS. MARGINS FOR E
-
LOAD
ARE ATTRACTIVE
AT 8%. IN COMPARISON, MARGINS FOR MOST FAST MOVING CONSUMER GOODS IS ABOUT 5
-
6%.

FOR
LIQUOR, MARGINS ARE 7 TO 8%.



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IN ADDITION, MARGINS OF OUR RETAILERS ARE AMPLIFIED BY THE VELOCITY OF E
-
LOAD TRANSACTIONS, WHOSE TURNOVER
IS GREATER THAN SOAP, SHAMPOO OR
LIQUOR.


FINALLY, ELOAD IS LOW
-
COST.

IT DOES NOT OCCUPY SHELF SPACE. UNLIKE SOFT DRINKS, YOU DON'T NEED REFRIGERATORS
WHICH CONSUME ELECTRICITY.

START UP COST CAN BE AS LOW AS 1,000 PESOS


500 PESOS FOR A CELFONE AND
ANOTHER 500 PESOS FOR INITIAL
AIRTIME LOAD.



WE’RE ALSO TESTING THE USE OF CELFONES TO OPEN ACCESS FOR THE UNBANKED POOR. SMART IS WORKING WITH
PLANET FINANCE TO DEVELOP A PROGRAM THAT WILL DELIVER LOANS IN DENOMINATIONS WITHIN REACH OF THE POOR,
AND RECEIVE MICROPAYMENTS, USING THE

CELFONE


AT COSTS LOWER THAN THOSE OF TRADITIONAL BANKING.


MICROFINANCE AS INCLUSIVE GROWTH INTERVENTION


TOGETHER WITH PINOYME FOUNDATION


A SOCIAL INVESTMENT FUND INSPIRED BY FORMER PRESIDENT CORY AQUINO


TWO IMPORTANT INNOVATIONS WERE CRAFTED:


FI
RST, A BUSINESS
-
TO
-
BUSINESS PORTAL WHERE MICRO
-
ENTREPRENEURS CAN DISPLAY AND DESCRIBE THEIR PRODUCTS
ON NET AND PROMOTE THEIR BUSINESS DIRECTLY TO THE BUYING PUBLIC.


SECOND, IS HAPINOY, A CHAIN OF THOUSANDS OF SARI
-
SARI STORES THAT POOL THEIR PURCHASING R
EQUIREMENTS, AND
ARE THUS ABLE TO OBTAIN DISCOUNTS FROM SUPPLIERS AND MANUFACTURERS.


ELECTRICITY AND WATER


OUR EXPERIENCE IN DEPLOYING TECHNOLOGY TO DEMOCRATIZE ACCESS IN THE TELCO SPACE IS NOW BEING REPLICATED
IN OUR POWER AND WATER.


MERALCO IS
PILOT
-
TESTING ITS SMART GRID PREPAID ELECTRICITY SERVICE IN ANTIPOLO. THE GOAL IS TO ENABLE
HOUSEHOLDS MANAGE THEIR ELECTRICITY CONSUMPTION BETTER, BY PROVIDING INFORMATION IN REAL
-
TIME. BETTER
MANAGEMENT WILL LEAD TO LOWER POWER BILLS.


SUCCESS IN ELECTRI
CITY CAN LEAD US TO REPLICATE THE PREPAID SERVICE IN WATER.


MORE BROADLY, WE’RE INVESTING IN INFRASTRUCTURE TO SUPPLY ACCESS TO ALL. WE’VE EXPANDED OUR TELECOMS
NETWORKS TO PROVIDE MORE INFORMATION, ESPECIALLY TO THE POOR. WE’VE INVESTED IN POWER TO PRO
VIDE GREATER
ACCESS TO ELECTRICITY AT AFFORDABLE PRICE. WE’VE INVESTED IN WATER TO SUPPLY ACCESS TO CLEAN WATER AND
BETTER SEWERAGE. WE’VE INVESTED IN TOLLWAYS SO THAT PEOPLE AND GOODS CAN TRAVEL FASTER AND AT LOWER
COST.





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WHY AGRICULTURE?


LET ME TURN T
O AGRICULTURE.


ABJECT POVERTY IS MOST ENDEMIC IN AGRICULTURE


WHERE MAJORITY OF OUR LABOR FORCE, DIRECT AND INDIRECT,
ARE DEPLOYED.


A STAGNANT AGRICULTURE EXACERBATES RURAL POVERTY, AND INCUBATES A SECOND ENCLAVE ECONOMY BY FORCING
MIGRATION FROM OUR BA
RRIOS TO OUR CITIES.


A VIBRANT AGRICULTURE WOULD FEED OUR PEOPLE, PROVIDE JOBS TO FARMERS, AND TO WORKERS IN PROCESSING
INDUSTRIES.


ONE APPROACH FOR AGRICULTURAL DEVELOPMENT


AND THE CONSEQUENT AMELIORATION OF POVERTY


MAY CONSIDER
WHAT INDONESIA HAS

DONE. IT IS CALLED “INTI PLASMA.” THIS INVOLVES COMMERCIAL FARMS ACTING AS CATALYSTS AND
NUCLEI OF DEVELOPMENT (OR INTI). CLUSTERED AROUND INTI ARE SMALL HOLDERS (OR PLASMA), WHICH WILL EMERGE AND
BENEFIT FROM THE RESOURCES IN TECHNOLOGY, CREDIT, INFRAS
TRUCTURE, PROCESSING FACILITIES AND MARKETS THAT
LARGE COMMERCIAL FARMS CAN PROVIDE.


THE IDEA OF COMMERCIAL FARMING WAS HATCHED IN THE AFTERMATH OF TYPHOON PABLO LAST YEAR, WHICH
DEVASTATED DAVAO ORIENTAL, INCLUDING COCONUT AND BANANA PLANTATIONS.


FIRST PACIFIC, TOGETHER WITH OUR SUBSIDARY, INDOFOOD


THE LARGEST INTEGRATED, PLANTATION TO FOOD COMPANY
IN INDONESIA



IS LOOKING TO DEVELOP A PALM OIL PLANTATION IN DAVAO ORIENTAL. INDOFOOD’S PLANTATIONS COVER MORE THAN
300,000 HECTARES PLANTED PRINCIP
ALLY TO PALM OIL, AND TO RUBBER, SUGAR, COFFEE, AND CACAO. WE ARE THE
WORLD’S 3RD LARGEST PALM OIL PRODUCER. INDOFOOD EMPLOYS ABOUT 300,000 WORKERS IN ITS PLANTATIONS.


WE APPRECIATE THAT THE NOTION OF COMMERCIAL FARMING CAN INVITE APPREHENSION AND CRIT
ICISM


PARTICULARLY
IN LIGHT OF AGRARIAN REFORM. IN FACT, WE’VE ALREADY RECEIVED DISAPPROVING REMARKS EVEN BEFORE THE FIRST
SPADE HAS BEEN PLACED ON THE GROUND. BUT LET ME QUICKLY GIVE YOU AN IDEA OF OUR THINKING.


THE GLOBAL MARKET FOR PALM OIL IS NEAR
LY SEVEN TIMES IN VALUE THAN THAT FOR COCONUT OIL. THE COST OF
PRODUCING COCONUT OIL IS 27 PERCENT HIGHER THAN THAT FOR PALM. AND YET, PALM OIL YIELDS ABOUT THREE TIMES
THE PROFIT FOR EVERY HECTARE OF PRODUCTION COMPARED WITH COCONUT PLANTATIONS. PALM TR
EES CAN ALSO BE
HARVESTED AT PRACTICALLY HALF THE TIME IT TAKES FOR COCONUT TREES TO MATURE.




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IN THIS COUNTRY, ON AVERAGE, 90,000 COCONUT HECTARES ARE NEEDED TO SERVE ONE COCONUT OIL MILL. FOR PALM
PLANTATIONS, THE RATIO IS ONE MILL FOR EVERY 5,000 HECTAR
ES. THIS MEANS MORE CAPITAL INVESTMENT WITH 18 PALM
MILLS.

AND FINALLY: PALM OIL PLANTATIONS REQUIRE TWICE MORE WORKERS THAN COCONUT FARMS.


OUR INTEREST IN AGRICULTURE RESTS PRECISELY BECAUSE IT CAN BE A MAJOR CREATOR OF JOBS IN PLACES WHERE
THEY’RE
DESPERATELY NEEDED. PALM OIL WOULD BE A START; WE’RE OPEN TO COFFEE, CACAO AND RUBBER AS WELL.


CONCLUSION


LET ME CLOSE BY SAYING THAT POVERTY PROVIDES A STARK REMINDER THAT WE


INCLUDING CHURCH AND BUSINESS


ARE ALL TIED TOGETHER IN THIS LIFE, IN THIS

NATION


THAT THE DESPAIR OF ONE TOUCHES US ALL. TO PARAPHRASE THE
MESSAGE OF THE DISASTER MOVIE,“2012”

“A PERSON BECOMES HUMAN NOT AS AN INDIVIDUAL, BUT IN COMMUNITY.”


I KNOW THAT WHEN YOU’RE SLEEPING ON THE STREETS OF CEBU, OR SITTING ON THE ROOF OF
YOUR FLOODED HOME IN
CATEEL, OR DIVING IN THE POLLUTED WATERS OF MANILA BAY AS A BAKAL BOY, IT IS HARD TO IMAGINE ANY FUTURE. BUT
WE MUST BELIEVE THAT THAT FUTURE WILL COME


THAT WITH EVERY DEPRIVATION COMES THE CHANCE OF RENEWAL,
THAT ADVERSITY CAN GIVE

BIRTH TO HOPE, THAT INCLUSIVE GROWTH HOLDS THE KEY TO A BETTER FUTURE FOR MOST OF
OUR PEOPLE.


IF WE ARE TO BUILD THE KINGDOM HERE ON EARTH, HERE IN THESE BLESSED ISLANDS, WE MUST LEARN TO BELIEVE IN
OURSELVES, AND IN OUR FUTURE. AT FIRST PACIFIC, THE OP
TIMISTS HAVE IT


NOT BECAUSE THEY ARE RIGHT BUT
BECAUSE THEY ARE POSITIVE. THAT IS THE WAY OF ACHIEVEMENT, OF IMPROVEMENT, OF SUCCES.


THANK YOU AND GOOD AFTERNOON.


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